Invest like Warren Buffett

One of the most successful investors of all time

According to the latest Forbes wealth list, Warren Buffett is the second wealthiest person in the world with a personal net worth $75,6 billion. He has committed more than 99% of his wealth to charity along with Bill Gates founder of Microsoft. He has already given away more $28, 5 billion of his wealth. An iconic name in business and investing, few hold as much esteem as Warren Buffet. Having made his fortune through smart investing and a fine eye for opportunity, there’s much we can learn from this legendary man.

Buffett still lives in the same house that he purchased in 1958 for $31,500. He is known for providing his memorable quotes about the art of investing. We will provide snippets of those quotes and success principles that you could implement into your personal investment strategies.

Recently, Buffet called online retail giant, Amazon’s, CEO Jeff Bezos “the most remarkable business person of our age.” This may seem to contradict earlier comments by the business legend regarding online shopping’s potential as a viable investment, but it proves our first lesson: to reach success, we need to be able to learn from our environment.

Here, we’ll look at some of Buffet’s best insights regarding investments – and how to apply this to our own property investment journeys.

Putting all your eggs in one basket it never a good idea – especially when considering the unpredictability of international markets. A master of diversifying, Buffet has major interests in a wide range of companies, including Coca-Cola, Wells Fargo, IBM, and Apple. How does that translate to the property investing world? Simply put, knowing your options is key.

Consistency is key

For anyone following Warren Buffet’s investment journey, one thing is clear: rather than investing in the latest fads, Buffet’s company, Berkshire Hathaway is relatively conservative when it comes to investing in new tech companies. Somewhat symbolic of this is the fact that Warren Buffet, reportedly, has only sent one email in his life – to Jeff Raikes of Microsoft. It is this hesitation to jump on the bandwagon of new tech industries that has delivered in the form of major returns. Buffet has said, numerous times, that he doesn’t understand technology. One of his key principles regarding investment is inherent value – something that has potential to create a return in and of itself. Although this may be refuted in relation to technology companies and their value, it is something that can easily be applied to property.

Property investment

When investing in property, it’s tempting to buy into the shiniest new developments. After all, newer is always better, right? For every successful property investment, there are 100 stories of failure. This may seem daunting, but it can be bypassed by having a clear investment strategy. By knowing what your long-term investment goals are, you are able to work towards it with clear and determined steps. To set up a winning investment plan, however, you need to know what makes a good opportunity.

If it seems too good

This one may seem counter-intuitive, but Buffet doesn’t buy into cheap companies, claiming, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” A company with a good brand value, strong management, and good growth prospects is the one you want to invest in.

The property market works in much the same way. The old saying of location, location, location still holds true. The modern property market offers many opportunities for this investment philosophy to be applied. Emerging areas, where future growth is likely, presents itself as an ideal investment opportunity.

Real Estate Investor Magazine (REIM) is South Africa’s leading print and online magazine and targeted at investor’s who want to build wealth through property investment. REIM is an invaluable investor resource tool for education, information, advice and inspiration.